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Cryptocurrencies As a New Global Financial Asset
Gina Pieters
Trinity University, Economics Dept, 1 Trinity Place, San Antonio, Texas, 78212, USA.University College London - Centre for Blockchain Technology, Malet Place, London WC1E 6BT UK
Abstract
The distribution of the crypto-market across economies has received little attention despitethe markets substantial size. I show that the distribution of fiat currencies across Bitcoindoes not correspond to the distribution across the crypto-market in general, with someeconomies investing considerably more (or considerably less) in non-Bitcoin cryptos. Becausecryptos represent their own medium of exchange I derive three different measures of fiatmarket shares: Direct, Purchase, and Implicit. All three measures find that while cryptosmay be globally traded, the crypto-market is highly concentrated in just three economies—the US dollar, the South Korean Won, and the Japanese Yen account for over 90% of allcrypto transactions. Fiat shares in the crypto market cannot be explained by size of thecorresponding stock market, economic size, income, financial openness, or digital access.Some currencies with large exposures to the crypto-market have only a small market-sharewhich may represent either increased diversification away from home-bias, a new route forfinancial contagion, or both.
1. Introduction
The crypto-market—consisting of cryptocurrencies, cryptotokens, and cryptoassets—is
a completely digital, online market that has the potential to financially connect economies
around the world. Cryptos—the most famous of which is Bitcoin—have no physically trade-
able form. Unlike traditional currencies or assets, are usually unlinked to a physical location
or market, and therefore they are not susceptible to the economic health of any single econ-
omy. There is also a low barrier to entry into the crypto-market: all that is required is internet
access. Information about a particular crypto is available to all market participants—the
lack of physical connection mean that there is no local information benefit. Taken together,
this implies a country importance to to the crypto-economy should be dictated by economic
Email address: [email protected] ( Gina Pieters)
size and predilection towards crypto-investment. Yet very little has been done to character-
ize the global distribution of crypto-purchases across fiat, state-issued currencies.1 While we
are aware that cryptos are traded internationally, we have no measure of the link between
this new digital market and any given economy even as the first Bitcoin-based products have
begun trading in formal financial markets, and daily crypto trading value exceed one quarter
of the USA stock market trades.2
Bitcoin and the crypto-market do not follow a price or return series associated with any
specific economy. Baur et al. (2017) show that Bitcoin prices do not have returns resembling
that of gold, equity indexes, or fiat currencies—following a a different volatility process than
other assets or exchange rates. Bouri et al. (2017) has similar findings using a portfolio-
based approach, with results showing that Bitcoin is a poor hedge against major world stock
indices, bonds, oil, gold, a commodity index, and the US dollar index, but instead acts as
a good diversifier given its lack of correlation. Phillip et al. (2018) expands the scope to
examine 224 cryptos, and similarly finds that they unique statistical properties.
One study that has examined the distribution of Bitcoin purchases, Hileman and Rauchs
(2017b), found that Bitcoin trades are dominated by four currencies: the US dollar, the
Chinese Yuan, the Euro and the Japanese Yen. However, Bitcoin now accounts for only 42%
of the crypto market capitalization. Given the lack of country-specific correlations across the
crypto market, it would be intuitive that if the US dollar is 40% of all Bitcoin purchases, it
should also be approximately 40% of all Ethereum, Litecoin, and Ripple purchases as well.
This paper is the first to document that the distribution of currencies across the crypto
market as whole is different from that of the Bitcoin market. This implies that some links
between economies and the crypto-market are stronger (or weaker) than Bitcoin purchases
would suggest.
1I will use the term “fiat currencies” to refer to recognized national monies, such as the US dollar, orJapanese Yen.
2Bitcoin futures began trading on the Chicago Board Exchange Options (CBOE) on December 10, 2017,and Bitcoin derivatives began trading on the Chicago Mercentile Exchange (CME) on December 18, 2017.
2
This paper is also the first to take the crypto-measurement problem seriously: a crypto
is a digital asset flow that can be denominated in a medium of exchange not associated with
any fiat, state currency. It may also not be feasible to directly purchase some cryptos, instead
a intermediate crypto may be purchased and used instead. I explore three different measures
of fiat shares in the crypto market, including an implicit currency exposure measure that
replaces all crypto-crypto purchases with their underlying fiat components. These measures
change the relative market share of cryptos, causing half of them to exchange ranks.
Regardless of measure used, over 90% of all fiat transactions occur based in just three
currencies: the South Korean Won, the US dollar, and the Japanese Yen. This concentration
of this digital financial market cannot be explained by stock market behavior, economic size,
income, financial openness, or internet access: our standard comparisons of cross-country
financial investment behavior do not seem to apply to this new market.
In Section 2 I describe my data set: the daily transaction data from 151 exchanges for
the top 50 cryptos. In Section 3 I construct the share of fiat transactions in the crypto-
market using different measures. In Section 4 I compare the Bitcoin and crypto market
transaction shares to global stock market transactions and show that they differ significantly.
Additionally, I show that fiat investment in the crypto-markets do not correspond to economy
size, income, or financial openness, and that the exposure to the crypto-market does not
correspond to market share. Section 5 concludes.
2. Data Collection and Summary
I collected the 24 hour transaction volume (measured in USD) for the fifty largest cryptos
as measured by market capitalization from Coinmarketcap3 for Saturday, December 16, 2017.
The data, shown in its original form in Figure 1, contains information on the total 24-hour
transaction volume for each pairing on each exchange. All volumes are measured in USD
dollars to ensure comparability. This data identifies 26 fiat currencies and 560 cryptos that
3http://www.coinmarketcap.com
3
Figure 1: Sample of Data Source
Note: Screen capture from www.coinmarketcap.com showing the raw format of the data. For each crypto (Bitcoin in the
example), Coinmarketcap reports 24-hour trade volume of pairs in each market. In the screenshot, the largest share of Bitcoin
trades, 6.30%, occurred on exchange Bitfinex in which Bitcoin were traded for $796,043,000 US dollars over the course of
24-hours.
were exchanged across 151 exchanges in exchange for the fifty cryptos.
By construction, this data set does not report any transactions that do not occur on ex-
changes (for example, direct wallet-to-wallet transactions), however it does capture off-chain
transactions that occur on exchanges. Off-chain transactions are transactions that are not
reported to the decentralized ledger (the blockchain), and are instead merely recorded on
the exchange’s books. Off-chaining is employed by exchanges for transactions that occur be-
tween parties registered on the exchange to reduce transactions costs and increase transaction
speed. The website blockchain.info4 reports the transaction information from the Bitcoin
4https://blockchain.info/ It reports only the quantity of bitcoins exchanged between two wallets, it doesnot report what was received in return.
4
blockchain, and reports that on December 16, 2017 Bitcoin’s total on-chain transaction vol-
ume was 262,598 Bitcoins. In contrast, CoinMarketCap recorded a transaction volume on
exchanges of approximately 808,042 Bitcoins. This shows that the off-chain transactions
dwarf the number of non-exchange transactions, and that focusing exclusively on data from
exchanges does not result in a significant information loss for Bitcoin. I will assume that
this pattern is sufficiently true for the other 49 cryptos as well, so that exchange transaction
data reflects the majority of crypto-transactions.
Table 1 summarizes the age, market capitalization, and the the 24-hour transaction
volume of the selected cryptos, and provides the full name associated with their code ab-
breviation. While the initial selection criteria required that the cryptos be one of the fifty
largest by market capitalization (out of the 1,373 cryptos recorded as existing), the result-
ing selection varies greatly in age and transaction volume. Some are less than a month old
(GNT), while others are over five years old (BCN). Some have amongst the highest daily
transaction volume in the crypto market (BTC), while others are not in the top 10% (VERI).
Some cryptos are sold on over 100 exchanges (LTC), while others trade on only 2 (BNB).
Some are only sold on exchanges where no fiat currencies are accepted (KMD), while others
(BTC) are sold on over 50 exchanges that accept fiat currency. I will use implicit currency
exposure to control for this difference in direct fiat access.
The total daily transaction value—including both fiat and crypto trades—is $29 billion
dollars. This is approximately one quarter of the $115 billion dollar traded daily on USA
stock markets.5 Table 2 summarizes top 20 of the 587 currencies and cryptos used as a
medium of exchange to purchase the fifty cryptos. Table 2 provides implicit evidence that
part of Bitcoin’s value comes from its high degree of convertibility: it is the only medium of
exchange, out of the 587 in the data set, that can be exchanged for all the top cryptos in the
market. The second highest convertibility comes from Ethereum, which can be exchanged
for only 42 of the top 50 cryptos, and the third is Tether, which can be exchanged for 35.
5Imputed by dividing the total value of 2016 USA stock trades according World Bank by 365 days.
5
Table 1: Summary of the Top Fifty Crypto
Market Capitalization 24-Hour Volume ExchangesAbbreviation Full Name Launch Date Rank USD Millions Rank USD Millions Total FiatADA Cardano Sep 29, 2017 7 9,507 10 465.85 4 1ARDR Ardor Jan 1, 2018 28 921 61 16.57 8 1ARK Ark Mar 21, 2017 38 473 78 12.42 7 2BCC BitConnect Jul 23, 2017 16 2,167 51 30.02 9 1BCH Bitcoin Cash Aug 1, 2017 3 30,135 7 1,057.27 97 41BCN Bytecoin Jul 4, 2012 31 652 96 8.96 3 0BNB Binance Coin Jul 14, 2017 41 439 31 47.94 2 0BTC Bitcoin Jan 3, 2009 1 324,300 1 15,639.73 94 55BTG Bitcoin Gold Nov 12, 2017 11 4,886 22 141 33 16BTS BitShares Jul 19, 2014 25 1,105 25 93.934 15 0DASH Dash Jan 18, 2014 8 7,082 18 171.47 71 27DCR Decred Feb 8, 2016 35 533 136 6.12 7 1DOGE Dogecoin Dec 6, 2013 32 638 23 13 44 8EMC2 Einsteinium Mar 1, 2014 42 414 34 41.08 3 0EOS EOS Jun 26, 2017 12 4,667 9 549.85 33 7ETC Ethereum Classic Jul 30, 2015 14 3,423 6 1142.45 50 14ETH Ethereum Oct 25, 2016 2 66,470 2 2089.92 97 39GBYTE Byteball Bytes Dec 25, 2016 46 374 40 38.29 3 0GNT Golem Dec 20, 2017 50 333 100 7.40 15 1HSR Hshare Jul 5, 2017 27 999 26 105.16 19 3KMD Komodo Sep 14, 2016 39 473 66 14.27 5 0LSK Lisk Jul 24, 2016 23 1,226 33 45.89 19 6LTC Litecoin Oct 7, 2011 5 16,101 5 1,300.63 119 48MIOTA IOTA Nov 27, 2016 6 10,155 13 288.02 8 3MONA MonaCoin Jan 1, 2014 29 791 69 20.18 11 3NEO NEO Oct 1, 2016 15 3,152 21 157.97 24 7NXT Nxt Nov 24, 2013 30 681 30 65.97 14 3OMG OmiseGO Jun 23, 2017 20 1,434 12 30 30 7PIVX PIVX Jan 29, 2016 48 341 123 5.87 10 3PPT Populous Jun 24, 2017 19 1,981 114 6.01 5 0QASH QASH Nov 8, 2017 45 385 42 39.77 8 2QTUM Qtum Mar 17, 2017 18 2,143 8 751.38 32 7REP Augur Oct 5, 2016 40 461 64 15.91 16 4SALT SALT Aug 15, 2017 37 506 54 22.11 5 0SC Siacoin Jun 7, 2015 44 387 90 14.5 6 0SNT Status Jun 17, 2015 43 411 27 77.22 15 0STEEM Steem Mar 24, 2016 36 525 120 5.55 5 0STRAT Stratis Aug 9, 2016 26 1,055 39 38.55 14 5TRON/TRX TRON Sep 9, 2017 17 2,146 11 419.57 12 1USDT Tether May 1, 2014 24 1,126 3 1,642.93 24 5VERI Veritaseum May 26, 2017 34 542 183 1.82 4 0VTC Vertcoin Jan 10, 2014 49 335 60 17.72 9 2WAVES Waves May 31, 2016 21 1,343 29 69.37 21 8XEM NEM Mar 31, 2015 9 5,881 24 96.93 18 5XLM Stellar Lumen Jul 31, 2014 13 3,754 14 210.55 20 5XMR Monero Apr 28, 2014 10 5,022 19 159.87 31 11XRB RaiBlocks Oct 4, 2015 47 351 115 6.28 4 1XRP Ripple Dec 20, 2012 4 29,174 4 1,390.58 60 29XVG Verge Sep 9, 2014 33 577 15 246.23 10 2ZEC ZCash Oct 28, 2016 22 1,323 20 155.40 47 16Total 553,302 29.402.84 151 94
Note: Market Capitalization is price times the quantity of coins in circulation, and is obtained from CoinMarketCap. The 24-
Hour transaction volume is also measured in USD and obtained from CoinMarketCap. A large market cap does not correspond
to large transaction volume (DCR), or vice verse (USDT). The cryptos have a mixture of ages: some are less than a month
old (GNT), while others are almost five years old (XRP). Exchanges is the number of exchanges on which transactions are
recorded: Total are all exchanges where transactions in the indicated crypto occur, while Fiat is only the exchanges on which
Fiat transactions have occurred.
6
Table 2: Both Fiat Currencies and Cryptos Are Used As Mediums For Crypto Transactions
Rank Currency F/C Volume (Million USD) # of Crypto’s1 Bitcoin Crypto $6,669 492 US dollar Fiat $5,875 313 South Korean Won Fiat $3,616 194 Japanese Yen Fiat $1,645 105 US Dollar Tether Crypto $1,549 356 Ethereum Crypto $1,353 427 Litecoin Crypto $702 288 Ripple Crypto $657 99 Cardano Crypto $588 310 Euro Fiat $517 2511 Ethereum Classic Crypto $497 612 Bitcoin Cash Crypto $451 913 Tron Crypto $350 314 BitConnect Crypto $284 615 Verge Crypto $268 516 Qtum Crypto $217 717 Eos Crypto $213 618 OmiseGo Crypto $201 519 Ink Crypto $184 420 Dash Crypto $154 11
Remaining Crypto $2,926Remaining Fiat $488
Note: “Volume” represents the 24-hour traded volume captured in the data-set, while “Number of Crypto’s” is the number of
crypto’s purchased using the indicated medium out of the 50 (or 49) in the dataset. Bitcoin, a crypto, is the most popular
means by which to trade cryptos, with the US dollar, a fiat currency, second. Bitcoin can buy all of the crypto’s, a feat that is
not accomplished by any of the other medium.
Interestingly, the volume of transactions and the variety of crypto’s a medium of exchange
can purchase is not strictly related. ADA has a higher transaction volume than DASH, but
ADA is used to buy only 3 cryptos while DASH is used to purchase 11.
Bitcoin is the most popular medium. The next most popular medium, and the most
popular fiat currency, is the USA dollar, which is used to purchase 31 out of the fifty cryptos.
Two Asian currencies, the South Korean Won and the Japanese Yen, are the third and
fourth, though their combined volume is less than that of the US dollar. The fifth most used
purchasing vehicle is a crypto known as US Dollar Tether (USDT). In theory, each USDT is
backed by a US dollar held in reserve by the company Tether Limited, although there has
7
never been an accounting audit to verify the truth of this claim. USDT has become popular
alternative amongst exchanges that do not wish to adhere to USA AML/KYC requirements
required if they facilitate trades in US dollars.
3. Measuring Fiat Share of the Crypto Market
3.1. Share of Aggregate Market
Table 3 summarizes the 24-hour transaction for the 26 fiat currencies. Fiat purchases
of Bitcoin, which represent about two-thirds of all crypto-fiat transactions (63.41%) are
not representative of fiat transactions in the general crypto-market. Some fiats purchase no
Bitcoin (CHF, CLP, CNH, CNY, HKD, ILS, NZD, RUR), while others purchase only Bitcoin
(MYR). The importance of Bitcoin within each countries portfolio differs widely: Among fiat
currencies that purchase both Bitcoin and other cryptos, the relative importance of Bitcoin
varies from 32.73% (KRW) to 96.92% (JPY). This means that a study that examines only
Bitcoin transactions may find difference different answers from one that studies the crypto
market as whole.
The largest market share of all crypto-fiat transactions belongs to the USD: it accounts
for nearly half of the market at 48.39% of all fiat transactions. This is followed by the KRW
at almost one third of the market (29.78%), and then the Japanese Yen (13.55%), and then
the Euro (4.26%). This differs from Bitcoin transactions: while the USD also accounts for
nearly half of all Bitcoin transactions (54.83%), JPY is second and accounts for nearly one-
fifth (20.71%). KRW has merely 15.37%, while the EUR share remains approximately at
the same share as the overall market at 4.82%. Across all of the non-Bitcoin crypto markets,
KRW dominates with over nearly half of all recorded non-Bitcoin transactions (54.76%),
USD about a third (37.22%), the EUR third (3.27%), with JPY (1.14%) and AUD (0.87%)
fourth and fifth. This is despite the fact documented in Hileman and Rauchs (2017a) that
54% of all new DLT ventures (ventures that create new cryptos) originate in North America,
with only 19% starting in the Asia-Pacific.
8
Table 3: Daily Fiat Transactions of Cryptocurrencies
Transactions (Mil. USD) Market Share (%)Name Bitcoin Crypto Bitcoin
Crypto(%) BTC Crypto Non-BTC
AUD Australian Dollar 42.68 81.50 52.37 0.55 0.67 0.87BRL Brazilian Real 25.86 30.79 84.00 0.34 0.25 0.11CAD Canadian Dollar 24.12 33.30 72.42 0.31 0.27 0.21CHF Swiss Franc - 0.36 - - 0.00 0.01CLP Chilean Peso - 0.20 - - 0.00 0.00CNH Offshore Chinese Yuan - 1.51 - - 0.01 0.03CNY Onshore Chinese Yuan - 5.83 - - 0.05 0.13EUR Euro 371.46 516.76 71.88 4.82 4.26 3.27GBP British Pound 54.05 62.07 87.08 0.70 0.51 0.18HKD Hong Kong Dollar - 0.46 - - 0.00 0.01IDR Indonesian Rupiah 16.78 43.68 38.43 0.22 0.36 0.61ILS Israeli New Shekel - 0.31 - - 0.00 0.01INR Indian Rupee 6.13 18.26 33.60 0.08 0.15 0.27JPY Japanese Yen 1,594.73 1,645.44 96.92 20.71 13.55 1.14KRW South Korean Won 1,183.43 3,616.19 32.73 15.37 29.78 54.76MXN Mexican Peso 8.81 12.69 69.38 0.11 0.10 0.09MYR Malaysian Ringgit 3.80 3.80 100 0.05 0.03 0.00NZD New Zealand Dollar - 0.02 - - 0.00 0.00PLN Polish Zloty 38.56 46.59 82.82 0.50 0.38 0.18RUB Russian Ruble 27.41 32.76 83.67 0.00 0.03 0.12RUR Old Russian Ruble - 3.25 - - 0.03 0.07SGD Singapore Dollar 3.68 6.38 57.68 0.05 0.05 0.06THB Thai Baht 12.29 27.82 44.15 0.16 0.23 0.35TRY Turkish Lira 41.25 52.64 78.37 0.54 0.43 0.26USD US Dollar 4,221.88 5,875.25 71.86 54.83 48.39 37.22ZAR South African Rand 22.69 24.11 94.09 0.29 0.20 0.03
Total 7,699.65 12,141.99 63.41
Note: Transaction values are in Millions of USD. BitcoinCrypto
is the share of the indicated currencies purchases in the cypto-market
that are used to purchases Bitcoin. This varies from 0% (or 32.73% if some Bitcoins are purchased) to 100%. The final three
columns are the share of all transactions value that the indicated currency represents: for only Bitcoin transactions (BTC), the
entire crypto market (Crypto), or for the non-Bitcoin transactions in the Crypto markets (Non-BTC).
3.2. Crypto composition
Table 3 showed that there is a difference between a fiat’s transaction share in the Bitcoin
market and a fiat’s transaction share in the crypto-market. However, Table 2 showed that
there is a substantial share of purchases conducted not in fiat currencies, but rather in
cryptos: Bitcoin is the most popular medium of exchange. Table 2 also revealed that there
is a large variation in convertibility between the various medium of exchanges and the top
50 cryptos. These two observations are related: It is possible that a fiat with low direct
9
convertibility is instead being converted into an intermediate crypto (for example Bitcoin)
which is then used to purchase the crypto of interest. This would then mean imply that the
fiat transaction share in the crypto market is artificially low. The following section constructs
different measures of crypto-currency market share, with the results summarized in Table 7.
3.2.1. Across fiat purchases
Among fiat currencies, the US dollar (USD) has the highest convertibility: it is used
for direct fiat purchases of 31 cryptos, the Euro (EUR) 25 cryptos, and third is the South
Korean Won (KRW) at 19 cryptos. It is not the case that all fiat currencies are used to buy
all cryptos. This is consistent with the purchasing behavior of crypto mediums as well, as
Bitcoin was the only crypto that could be used to purchase the remaining 49 cryptos.
Twelve crypto’s have no direct purchases in fiat currencies. Nine have purchases only in
one fiat currency: two in South Korean Won, three in Euro, three in US dollar, and one in
Japanese Yen. One the other end of the spectrum, Bitcoin (BTC) is purchased by 18 fiat
currencies, Ethereum (ETH) by 20, and Litceoin (LTC) by 18. While Bitcoin is used to
purchase all cryptos, and has the greatest transaction volume, Ethereum has the greatest
variety of direct fiat purchases.
The direct fiat market share (Df,F ) of any given fiat (f), previously reported without
formal definition in Table 3, is simply the sum of all the crypto(c) expenditures of the fiat,
(∑
c Vfc ), over the sum of the expenditures of all fiat (g) in the crypto market
Df,F =
∑c V
fc∑
c
∑g V
gc
(1)
Table 4 shows the fiat share for each crypto (Sf,Fc ) calculated by comparing the US dollar
denominated value of fiat currency’s purchase of the crypto as a share all fiat purchases of
the crypto to that of all fiat purchases of that crypto:
Sf,Fc =
V fc∑g V
gc
(2)
10
Table 4: Share of Fiat Purchases Within Each Crypto (% of Fiat Transactions)
# Fiat AUD BRL CAD CHF CLP CNH CNY EUR GBP HKD IDR ILS INR JPY KRW MXN MYR NZD PLN RUB RUR SGD THB TRY USD ZARADA 1 - - - - - - - - - - - - - - 100 - - - - - - - - - - -ARDR 1 - - - - - - - 100 - - - - - - - - - - - - - - - - - -ARK 1 - - - - - - - 100 - - - - - - - - - - - - - - - - - -BCC 1 - - - - - - - - - - - - - - - - - - - - - - - - 100 -BCH 18 0.42 0.34 0.41 - - - - 2.78 0.09 - 0.45 0.01 0.23 0.56 59.29 - - 0.01 0.52 0.14 0.03 0.74 0.38 - 33.56 0.04BCN 0 - - - - - - - - - - - - - - - - - - - - - - - - - -BNB 0 - - - - - - - - - - - - - - - - - - - - - - - - - -BTC 18 0.55 0.34 0.31 - - - - 4.82 0.70 - 0.22 - 0.08 20.71 15.37 0.11 0.05 - 0.50 0.36 - 0.05 0.16 0.54 54.83 0.29BTG 9 - 0.02 - - - - - 0.26 0.00 - 1.24 - - - 85.78 - - - 0.07 - 0.03 - 0.07 - 12.55 -BTS 0 - - - - - - - - - - - - - - - - - - - - - - - - - -DASH 12 - 0.00 - - - 1.79 - 5.18 0.01 - - - - - 39.09 - - - 0.45 1.39 1.32 - 0.31 0.45 49.91 0.09DCR 1 - - - - - - - 100 - - - - - - - - - - - - - - - - - -DOGE 6 - - - - - - - 10.49 0.11 - - - - - - - - - - 0.12 3.28 - - 76.1 9.90 -EMC2 0 - - - - - - - - - - - - - - - - - - - - - - - - - -EOS 4 - - - - - - 0.01 - - - - - - - 70.41 - - - - - 0.01 - - - 29.57 -ETC 7 0.51 - - - - - - 1.17 0.00 - 0.74 - - - 84.79 - - - - - 0.02 - - - 12.76 -ETH 20 0.90 - 0.58 0.06 0.03 0.09 - 7.00 - 0.07 0.28 - 0.28 0.51 30.54 0.30 - - 0.19 0.17 0.15 0.04 0.39 0.83 57.57 0.03GBYTE 0 - - - - - - - - - - - - - - - - - - - - - - - - - -GNT 1 - - - - - - - - - - - - - - - - - - - - - - - - 100 -HSR 3 99.34 - - - - - - - - - - - - 0.66 - - - - - - - - - - 0.00 -KMD 0 - - - - - - - - - - - - - - - - - - - - - - - - - -LSK 3 - - - - - - - 0.54 - - - - - - - - - - 90.16 - - - - - 9.30 -LTC 20 0.58 0.60 0.68 - - 0.04 0.00 6.91 1.25 0.00 0.16 0.05 0.32 0.04 15.91 - - - 0.45 0.08 0.17 - 0.11 0.60 71.98 0.06MIOTA 2 - - - - - - - - - - - - - - 24.78 - - - - - - - - - 75.22 -MONA 1 - - - - - - - - - - - - - 100 - - - - - - - - - - - -NEO 4 - - - - - - - - - - - - - - 3.05 - - - - - - 0.00 0.00 - 96.94 -NXT 3 - - - - - - - 0.78 - - 99.13 - - - - - - - - - - - - - 0.09 -OMG 3 - - - - - - - - - - - - - - 1.09 - - - - - - - 8.26 - 90.64 -PIVX 3 - - - - - - - 92.46 - - - - - - - - - - 6.83 - - - - - 0.71 -PPT 0 - - - - - - - - - - - - - - - - - - - - - - - - - -QASH 4 - - - - - - - 0.00 - - - - - 5.98 - - - - - - - 0.05 - - 93.97 -QTUM 2 - - - - - - - - - - - - - - 96.25 - - - - - - - - - 3.75 -REP 3 - - - - - - - 89.96 - - - - - - - - - - - - - - 5.03 - 5.02 -SALT 0 - - - - - - - - - - - - - - - - - - - - - - - - - -SC 0 - - - - - - - - - - - - - - - - - - - - - - - - - -SNT 0 - - - - - - - - - - - - - - - - - - - - - - - - - -STEEM 0 - - - - - - - - - - - - - - - - - - - - - - - - - -STRAT 4 - - - - - - - 69.80 1.23 - - - - - 22.69 - - - - - - - - - 6.29 -TRON 1 - - - - - - - - - - - - - - 100 - - - - - - - - - - -USDT 2 - - - - - - - - - - - - - - - - - - - 0.18 - - - - 99.82 -VERI 0 - - - - - - - - - - - - - - - - - - - - - - - - - -VTC 2 - - - - - - - 96.64 3.36 - - - - - - - - - - - - - - - - -WAVES 6 - - - - - - - 2.15 - - 82.76 - - - 0.06 - - - - 9.08 2.47 - - - 3.47 -XEM 4 - - - - - - - 0.34 - - - - - 97.63 - - - - - - 0.61 - - - 1.42 -XLM 5 - - - - - - 6.26 0.01 - - 91.53 - - 1.58 - - - - - - - - - - 0.61 -XMR 5 - 0.02 - - - - - 6.11 - - - - - - 47.03 - - - 0.03 - - - - - 46.81 -XRB 1 - - - - - - - - - - - - - - - - - - - - - - - - 100 -XRP 14 1.13 0.01 - - - - 0.73 4.26 0.00 - 0.64 - 1.07 1.46 62.55 0.28 - - - 0.3 - - 0.45 - 27.05 0.07XVG 2 - - - - - - - 99.79 - - - - - - - - - - - - - - - - 0.21 -ZEC 7 - - - - - - - 4.26 - - - - - - 46.51 - - - 0.1 0.70 0.24 - - - 47.83 0.35# of Crypto 7 7 4 1 1 3 4 25 10 2 10 2 5 10 19 3 1 1 10 10 11 5 10 5 31 7Direct Share 0.67 0.25 0.27 0.00 0.00 0.01 0.05 4.26 0.51 0.00 0.36 0.00 0.15 13.55 29.78 0.10 0.03 0.00 0.38 0.27 0.03 0.05 0.23 0.43 48.39 0.20Purchase Share 0.77 0.32 0.36 0.06 0.03 0.12 0.35 4.74 0.61 0.04 0.41 0.03 0.18 16.34 30.10 0.14 0.05 0.01 0.49 0.32 0.12 0.07 0.27 0.59 48.94 0.24
Note: Each number represents the share the fiat currency (column heading) represents of all fiat purchases of the crypto (row
heading). A “-” indicates no transactions were recorded. For example, the value of 100 for the ADA-KRW pair indicates that
100% of ADA fiat purchases were conducted using the Korean Won (KRW). The 0.42 BCH-AUD pair indicates that 0.42%
of BCH fiat purchases were conducted using the Australian dollar. The “# Fiat” column indicates how many fiat currencies
were used to directly purchase the indicated crypto, while the “# of Crypto” indicates how many crypto’s the indicated fiat
currencies purchased. The Direct Share is the the share of total crypto market transactions using the indicated fiat, while the
Purchase share is the share of fiat crypto market transactions only in the cryptos purchased.
This fiat share reveals the skewed distribution of fiat purchasing: While the USD is about
one half of all crypto-fiat purchases, the USD transaction share varies from 100% (BCC,
GNT, XRB), down to 0.21% (XVG). Not only do fiat currencies purchase different number
of crypto’s, they account for a widely different share of that individual crypto when they do.
Therefore, in addition to to the fiat market share in equation 1, I use the data in Table
11
4 to construct a new measure called purchase share (P f,F ).
P f,F =
∑c V
fc∑
g|V fc >0 V
gc
(3)
The purchase share differs from the market share in the denominator value. Purchase
share uses only the market transaction value of cryptos purchased by the considered fiat,
not the the entire market of cryptos. Suppose ExampleFiat (EF) purchases $100 of Crypto1
(C1), $200 of Crypto2 (C2), and $0 of Crypto 3 (C3), while the total fiat purchases of
Crypto1, Crypto2, and Crypto3 is $500 each. The three shares of ExampleFiat is SEF,FC1 =
100500
= 0.20, SEF,FC2 = 200
500= 0.40, SEF,F
C3 = 0500
= 0.00. The Market Share of Example Fiat is
MEF,F = $100+$200+$0$500+$500+$500
= 0.20, while the Purchase Share is MEF,F = $100+$200$500+$500
= 0.30.
Given that the denominator associated with the purchase share will always be less than
or equal to that of the market share, the purchase share of any given fiat will always be
greater than or equal to that of its market share. The greatest difference in Table 4 between
market share and purchase shares occurs for fiat currencies that are concentrated in only a
few cryptos: the onshore Chinese Yuan has a market share of only 0.05%, but a purchase
share seven times greater than that of 0.35%. This reflects the fact that it directly purchases
only 4 cryptos in the market.
3.2.2. As a share of total purchases
Table 3 established that Bitcoin purchases are not a good measure of cryptocurrency fiat
transactions, and Table 4 that there is not a uniform distribution of fiat currency purchases of
cryptos. However, Table 1 showed that there were differences in exchange access to cryptos:
some crypto’s have very few purchases in fiat currencies. Table 5 reports the share of fiat
purchases as a share of the total of purchases of the crypto, using both fiat (V fc ) and cryptos
(V dc ) transaction values.6
6Note that V cc = 0. I have no record of same-currency transactions (for example, using Bitcoin to purchase
Bitcoin).
12
Table 5: Distribution of Purchasing (% of total transactions)
Fiat % AUD BRL CAD CHF CLP CNH CNY EUR GBP HKD IDR ILS INR JPY KRW MXN MYR NZD PLN RUB RUR SGD THB TRY USD ZARADA 1.08 - - - - - - - - - - - - - - 1.08 - - - - - - - - - - -ARDR 0.06 - - - - - - - 0.06 - - - - - - - - - - - - - - - - - -ARK 0.07 - - - - - - - 0.07 - - - - - - - - - - - - - - - - - -BCC 0.05 - - - - - - - - - - - - - - - - - - - - - - - - 0.05 -BCH 31.27 0.13 0.11 0.13 - - - - 0.87 0.03 - 0.14 0.00 0.07 0.18 18.54 - - 0.00 0.16 0.04 0.01 0.23 0.12 - 10.50 0.01BCN - - - - - - - - - - - - - - - - - - - - - - - - - - -BNB - - - - - - - - - - - - - - - - - - - - - - - - - - -BTC 49.23 0.27 0.17 0.15 - - - - 2.38 0.35 - 0.11 - 0.04 10.2 7.57 0.06 0.02 - 0.25 0.18 - 0.02 0.08 0.26 26.99 0.15BTG 57.85 - 0.01 - - - - - 0.15 0.00 - 0.72 - - - 49.62 - - - 0.04 - 0.02 - 0.04 - 7.26 -BTS - - - - - - - - - - - - - - - - - - - - - - - - - - -DASH 23.07 - 0.00 - - - 0.41 - 1.20 0.00 - - - - - 9.02 - - - 0.10 0.32 0.30 - 0.07 0.10 11.51 0.02DCR 0.05 - - - - - - - 0.05 - - - - - - - - - - - - - - - - - -DOGE 2.31 - - - - - - - 0.24 0.00 - - - - - - - - - - 0.00 0.08 - - 1.76 0.23 -EMC2 - - - - - - - - - - - - - - - - - - - - - - - - - - -EOS 60.27 - - - - - - 0.00 - - - - - - - 42.44 - - - - - 0.00 - - - 17.82 -ETC 55.61 0.29 - - - - - - 0.65 0.00 - 0.41 - - - 47.16 - - - - - 0.01 - - - 7.10 -ETH 30.28 0.27 - 0.18 0.02 0.01 0.03 - 2.12 - 0.02 0.08 - 0.09 0.15 9.25 0.09 - - 0.06 0.05 0.05 0.01 0.12 0.25 17.43 0.01GBYTE - - - - - - - - - - - - - - - - - - - - - - - - - - -GNT 1.23 - - - - - - - - - - - - - - - - - - - - - - - - 1.23 -HSR 16.15 16.04 - - - - - - - - - - - - 0.11 - - - - - - - - - - 0.00 -KMD - - - - - - - - - - - - - - - - - - - - - - - - - - -LSK 4.95 - - - - - - - 0.03 - - - - - - - - - - 4.46 - - - - - 0.46 -LTC 47.3 0.28 0.28 0.32 - - 0.02 0.00 3.27 0.59 0.00 0.08 0.02 0.15 0.02 7.53 - - - 0.21 0.04 0.08 - 0.05 0.28 34.05 0.03MIOTA 51.5 - - - - - - - - - - - - - - 12.76 - - - - - - - - - 38.73 -MONA 62.69 - - - - - - - - - - - - - 62.69 - - - - - - - - - - - -NEO 12.23 - - - - - - - - - - - - - - 0.37 - - - - - - 0.00 0.00 - 11.85 -NXT 2.37 - - - - - - - 0.02 - - 2.35 - - - - - - - - - - - - - 0.00 -OMG 28.70 - - - - - - - - - - - - - - 0.31 - - - - - - - 2.37 - 26.02 -PIVX 0.60 - - - - - - - 0.55 - - - - - - - - - - 0.04 - - - - - 0.00 -PPT - - - - - - - - - - - - - - - - - - - - - - - - - - -QASH 55.66 - - - - - - - 0.00 - - - - - 3.33 - - - - - - - 0.03 - - 52.3 -QTUM 60.05 - - - - - - - - - - - - - - 57.80 - - - - - - - - - 2.25 -REP 12.58 - - - - - - - 11.32 - - - - - - - - - - - - - - 0.63 - 0.63 -SALT - - - - - - - - - - - - - - - - - - - - - - - - - - -SC - - - - - - - - - - - - - - - - - - - - - - - - - - -SNT - - - - - - - - - - - - - - - - - - - - - - - - - - -STEEM - - - - - - - - - - - - - - - - - - - - - - - - - - -STRAT 0.36 - - - - - - - 0.25 0.00 - - - - - 0.08 - - - - - - - - - 0.02 -TRON 28.62 - - - - - - - - - - - - - - 28.62 - - - - - - - - - - -USDT 2.16 - - - - - - - - - - - - - - - - - - - 0.00 - - - - 2.16 -VERI - - - - - - - - - - - - - - - - - - - - - - - - - - -VTC 0.46 - - - - - - - 0.44 0.02 - - - - - - - - - - - - - - - - -WAVES 4.07 - - - - - - - 0.09 - - 3.37 - - - 0.00 - - - - 0.37 0.1 - - - 0.14 -XEM 21.96 - - - - - - - 0.07 - - - - - 21.44 - - - - - - 0.13 - - - 0.31 -XLM 4.41 - - - - - - 0.28 0.00 - - 4.04 - - 0.07 - - - - - - - - - - 0.03 -XMR 32.95 - 0.01 - - - - - 2.01 - - - - - - 15.50 - - - 0.01 - - - - - 15.43 -XRB 0.06 - - - - - - - - - - - - - - - - - - - - - - - - 0.06 -XRP 51.22 0.58 0.01 - - - - 0.38 2.18 0.00 - 0.33 - 0.55 0.75 32.04 0.14 - - - 0.15 - - 0.23 - 13.85 0.04XVG 0.70 - - - - - - - 0.70 - - - - - - - - - - - - - - - - 0.00 -ZEC 27.57 - - - - - - - 1.17 - - - - - - 12.83 - - - 0.03 0.19 0.07 - - - 13.19 0.1Direct Share 0.28 0.10 0.00 0.00 0.00 0.01 0.02 1.76 0.21 0.00 0.15 0.00 0.06 5.60 12.30 0.04 0.01 0.00 0.16 0.11 0.01 0.02 0.09 0.18 19.98 0.08Purchase Share 0.36 0.16 0.17 0.02 0.01 0.04 0.17 2.13 0.30 0.01 0.19 0.01 0.08 7.50 13.74 0.07 0.02 0.00 0.22 0.14 0.05 0.03 0.12 0.27 20.93 0.11
Note: Each number represents the share the fiat currency (column heading) represents of all purchases of the crypto (row
heading). A “-” indicates no transactions were recorded. For example, the value of 0.06 for the ARDR-EUR pair indicates that
0.06% of ARDR purchases were conducted using the Euro (EUR). The “% Fiat” column indicates the share of total transactions
that were conducted using Fiat currencies. Direct share is the share of all crypto transactions the indicated fiat is used in, while
average share is the Purchase share is the share of all the purchased cryptos.
Sf,Tc =
V fc∑
g Vgc +
∑d V
dc
(4)
The share of each crypto directly purchased using any kind of fiat currency varies widely:
from 0.06% (BCC) to 62.69% (MONA). Approximately half of Bitcoin transactions are
direct to fiat (49.23%), so that approximately one quarter of all Bitcoin transactions are fiat
transactions using the US dollar (26.99%).
The relative importance of each fiat amongst the cryptos they purchase decreases, but it
still true that there is a skewed distribution of transaction shares: while the average purchase
13
share of KRW is 18.55%, for individual cryptos this varies from almost 0% (WAVES) to to
49.62% (BTG), for US dollars it varies from almost 0% (HSR) to 52.3% (QASH), while for
the Japanese Yen it varies from 0.02% (LTC) to 62.69% (MONA).
While both the USD and the KRW accounted for about a half of all fiat purchases within
the cryptos they bought, once all transactions are considered KRW accounts for 18.55%
while the USD accounts for only 10.05% of the market share. Similarly, while the EUR and
JPY accounted for 32.23% and 22.91% of fiat purchases, they now account for only 1.20%
and 9.89% respectively. This indicates that cryptos purchased by the USD and EUR contain
more transactions using alternative cryptos than cryptos purchased by KRW or JPY.
3.2.3. As an implied share
While it is difficult for government to ban crypto purchases, it may be harder to obtain
some cryptos than others. A way around this is to purchase an easily accessible crypto, for
example Bitcoin, and then use that to purchase the desired crypto. This poses a problem for
the market and purchase shares calculated in Tables 4 and 5, as there are crypto transactions
that are, in fact, fiat-like transactions. I will accommodate this issue by calculating the
implicit currency exposure for each crypto-fiat pair.
Table 5 showed that about one quarter (26.99%) of all Bitcoin transactions are conducted
using the US dollars. Suppose that another crypto, ExampleCoin, is purchased only by
Bitcoin. That crypto then inherits 26.99% implicit exposure to the US dollar via the original
Bitcoin purchases, assuming the same composition of purchasers.7 Suppose ExampleCoin is
10% of the transaction share of another crypto, AnotherCoin. Another crypto would then
inherent 2.699% (0.10x26.999%) exposure to the US dollar, in to addition to whatever direct
US dollar exposure AnotherCoin already contained. This process continues on iteratively
until all purchases by cryptos are replaced by their underlying fiat components.
7While this is a strong assumption, there is no empirical evidence that would allow a more refined analysis.It is highly probable that this behavior is more likely to be undertaken by highly regulated currencies, such asthe USD, or by fiats associated with countries using capital controls or exchange rate manipulation (Pieters(2016)).
14
Table 6 shows the fiat shares using implicit currency exposure. As I did not have trans-
action data for all 560 cryptos, some transaction volume is lost. The column “Total %”
reports the share the crypto transaction data that can be captured using the fiat purchases:
it averages 84.84%, though ranges from a low of 70.31% (BTS) to a high of 93.25% (EOS).
Almost half of all transactions can be traced back to USD (41.76%), the KRW representing
about a quarter of all transactions (22.46%), and finally the JPY at about a tenth of all
transactions (12.91%).
Under implicit currency exposure all fiats purchase some amount of all cryptos because
Bitcoin purchases all cryptos. Even if a fiat doesn’t purchase Bitcoin directly, the crypto(s)
it does purchase will have some exposure to Bitcoin, which then links the fiat to all other
cryptos. Because of this, the market share and the purchase share under implied currency
exposure has the same value.
3.3. Summary
Table 7 summarizes each fiat’s bitcoin share, market share, and purchase share of all fiat
transactions, as well as the implicit currency share. It also shows the corresponding rank of
each currency for each of the four measures ranging from the largest share (1) to the smallest
share (26).
The top 9 and bottom 2 fiats, accounting for about 98% of all transactions in the crypto
market, retain the same ranking for all the non-BTC-exclusive transaction shares, with the
middle 15 cryptos rearranging ranks based on the different measurements. The important of
the fiat in the crypto economy can vary based on the measure used. The largest basis point
difference for the JPY which ranges between 13.55% and 16.34%, while the largest growth
(of the non-near-zero fiat shares) belongs to the CNH which ranges from 0.01% to 0.12%.
Figure 2 shows how using the implicit currency exposure changes the distribution of
fiats across cryptos. The color ranges from Red (the fiat is a low share of transactions for
that crypto) to Green (the fiat is a high share of purchases for that crypto). A clear row
indicates that no fiat purchase the indicated crypto. Figure 2a shows the distribution of fiat
15
Table 6: Distribution of Purchasing (% of total transactions, crypto-equivalent)
Total % AUD BRL CAD CHF CLP CNH CNY EUR GBP HKD IDR ILS INR JPY KRW MXN MYR NZD PLN RUB RUR SGD THB TRY USD ZARADA 83.90 0.59 0.24 0.25 0.00 0.00 0.01 0.03 3.87 0.50 0.00 0.28 0.00 0.11 13.69 19.13 0.09 0.03 0.00 0.37 0.26 0.02 0.04 0.18 0.41 43.60 0.20ARDR 83.90 0.59 0.24 0.25 0.00 0.00 0.01 0.03 3.87 0.50 0.00 0.28 0.00 0.11 13.69 19.13 0.09 0.03 0.00 0.37 0.26 0.02 0.04 0.18 0.41 43.60 0.20ARK 83.90 0.59 0.24 0.25 0.00 0.00 0.01 0.03 3.87 0.50 0.00 0.28 0.00 0.11 13.69 19.13 0.09 0.03 0.00 0.37 0.26 0.02 0.04 0.18 0.41 43.60 0.20BCC 83.90 0.59 0.24 0.25 0.00 0.00 0.01 0.03 3.87 0.50 0.00 0.28 0.00 0.11 13.69 19.13 0.09 0.03 0.00 0.37 0.26 0.02 0.04 0.18 0.41 43.60 0.20BCH 83.90 0.59 0.24 0.25 0.00 0.00 0.01 0.03 3.87 0.50 0.00 0.28 0.00 0.11 13.69 19.13 0.09 0.03 0.00 0.37 0.26 0.02 0.04 0.18 0.41 43.60 0.20BCN 83.90 0.59 0.24 0.25 0.00 0.00 0.01 0.03 3.87 0.50 0.00 0.28 0.00 0.11 13.69 19.13 0.09 0.03 0.00 0.37 0.26 0.02 0.04 0.18 0.41 43.60 0.20BNB 59.43 0.42 0.16 0.18 0.00 0.00 0.01 0.02 2.77 0.34 0.00 0.21 0.00 0.08 9.04 13.64 0.07 0.02 0.00 0.25 0.18 0.02 0.03 0.13 0.30 31.43 0.13BTC 84.30 0.56 0.25 0.25 0.00 0.00 0.01 0.02 3.92 0.51 0.00 0.28 0.00 0.10 14.27 18.51 0.09 0.03 0.00 0.38 0.27 0.02 0.04 0.18 0.42 43.97 0.21BTG 93.19 0.25 0.11 0.11 0.00 0.00 0.00 0.01 1.78 0.21 0.00 0.84 0.00 0.05 5.74 57.69 0.04 0.01 0.00 0.19 0.11 0.02 0.02 0.12 0.18 25.63 0.08BTS 70.31 0.51 0.20 0.21 0.00 0.00 0.01 0.02 3.25 0.40 0.00 0.24 0.00 0.09 11.06 16.48 0.08 0.03 0.00 0.30 0.21 0.02 0.03 0.16 0.35 36.49 0.16DASH 87.54 0.45 0.18 0.20 0.00 0.00 0.42 0.02 4.20 0.38 0.00 0.22 0.00 0.08 10.38 23.73 0.07 0.02 0.00 0.38 0.52 0.32 0.03 0.21 0.43 45.11 0.17DCR 84.31 0.56 0.25 0.25 0.00 0.00 0.01 0.02 3.97 0.51 0.00 0.28 0.00 0.10 14.26 18.50 0.09 0.03 0.00 0.38 0.27 0.02 0.04 0.18 0.42 43.95 0.21DOGE 80.69 0.53 0.23 0.24 0.00 0.00 0.01 0.02 3.88 0.48 0.00 0.26 0.00 0.10 13.10 17.37 0.09 0.03 0.00 0.35 0.25 0.09 0.04 0.17 2.15 41.11 0.19EMC2 84.31 0.56 0.25 0.25 0.00 0.00 0.01 0.02 3.92 0.51 0.00 0.28 0.00 0.10 14.26 18.51 0.09 0.03 0.00 0.38 0.27 0.02 0.04 0.18 0.42 43.98 0.21EOS 93.25 0.24 0.09 0.10 0.00 0.00 0.01 0.01 1.55 0.18 0.00 0.11 0.00 0.05 5.00 50.29 0.04 0.01 0.00 0.14 0.10 0.01 0.02 0.08 0.17 34.99 0.07ETC 92.64 0.56 0.10 0.11 0.00 0.00 0.00 0.01 2.35 0.21 0.00 0.54 0.00 0.05 5.81 55.88 0.04 0.01 0.00 0.16 0.11 0.02 0.02 0.08 0.18 26.29 0.08ETH 79.85 0.66 0.13 0.32 0.02 0.01 0.03 0.02 4.30 0.27 0.02 0.26 0.00 0.15 7.65 21.71 0.14 0.02 0.00 0.26 0.19 0.06 0.04 0.24 0.48 42.73 0.12GBYTE 84.30 0.56 0.25 0.25 0.00 0.00 0.01 0.02 3.92 0.51 0.00 0.28 0.00 0.10 14.27 18.51 0.09 0.03 0.00 0.38 0.27 0.02 0.04 0.18 0.42 43.97 0.21GNT 83.83 0.57 0.23 0.26 0.00 0.00 0.01 0.02 3.91 0.47 0.00 0.28 0.00 0.11 13.10 18.85 0.10 0.03 0.00 0.36 0.25 0.02 0.04 0.19 0.42 44.41 0.19HSR 85.62 16.59 0.19 0.21 0.00 0.00 0.01 0.02 3.18 0.38 0.00 0.23 0.00 0.10 10.35 17.18 0.08 0.02 0.00 0.28 0.20 0.02 0.03 0.16 0.34 35.87 0.15KMD 84.25 0.56 0.25 0.25 0.00 0.00 0.01 0.02 3.92 0.51 0.00 0.28 0.00 0.10 14.18 18.55 0.10 0.03 0.00 0.38 0.27 0.02 0.04 0.18 0.42 43.96 0.20LSK 85.02 0.53 0.23 0.24 0.00 0.00 0.01 0.02 3.75 0.48 0.00 0.27 0.00 0.10 13.49 17.63 0.09 0.03 0.00 4.82 0.25 0.02 0.04 0.17 0.40 42.24 0.19LTC 91.04 0.60 0.41 0.45 0.00 0.00 0.02 0.01 5.28 0.85 0.00 0.23 0.02 0.21 6.92 17.82 0.05 0.02 0.00 0.40 0.17 0.09 0.02 0.15 0.50 56.70 0.13MIOTA 91.91 0.28 0.11 0.13 0.00 0.00 0.01 0.01 1.93 0.23 0.00 0.14 0.00 0.05 6.29 22.04 0.05 0.02 0.00 0.17 0.12 0.01 0.02 0.09 0.21 59.90 0.09MONA 92.69 0.20 0.09 0.09 0.00 0.00 0.00 0.01 1.39 0.18 0.00 0.10 0.00 0.04 67.77 6.59 0.03 0.01 0.00 0.14 0.09 0.01 0.02 0.06 0.15 15.64 0.07NEO 85.12 0.52 0.20 0.22 0.00 0.00 0.01 0.02 3.40 0.42 0.00 0.25 0.00 0.10 11.61 17.15 0.08 0.03 0.00 0.32 0.22 0.02 0.04 0.16 0.37 49.82 0.17NXT 84.43 0.56 0.24 0.25 0.00 0.00 0.01 0.02 3.82 0.49 0.00 2.63 0.00 0.10 13.62 18.35 0.09 0.03 0.00 0.36 0.26 0.02 0.04 0.18 0.41 42.74 0.20OMG 88.21 0.43 0.17 0.18 0.00 0.00 0.01 0.02 2.77 0.34 0.00 0.20 0.00 0.08 9.33 14.19 0.07 0.02 0.00 0.25 0.18 0.02 0.03 2.51 0.30 56.98 0.14PIVX 84.40 0.55 0.25 0.25 0.00 0.00 0.01 0.02 4.45 0.51 0.00 0.28 0.00 0.00 14.18 18.40 0.09 0.03 0.00 0.42 0.26 0.02 0.04 0.18 0.42 43.72 0.20PPT 81.78 0.62 0.18 0.29 0.01 0.01 0.02 0.02 4.14 0.38 0.01 0.27 0.00 0.13 10.51 20.33 0.12 0.02 0.00 0.31 0.23 0.04 0.04 0.22 0.46 43.26 0.16QASH 92.26 0.27 0.09 0.12 0.00 0.00 0.01 0.01 1.77 0.19 0.00 0.12 0.00 0.05 8.52 8.88 0.05 0.01 0.00 0.15 0.11 0.01 0.04 0.09 0.19 71.49 0.08QTUM 87.16 0.20 0.08 0.08 0.00 0.00 0.00 0.01 1.25 0.16 0.00 0.09 0.00 0.04 4.24 64.18 0.03 0.01 0.00 0.12 0.08 0.01 0.01 0.06 0.13 16.32 0.06REP 85.43 0.54 0.20 0.22 0.00 0.00 0.01 0.02 14.71 0.41 0.00 0.25 0.00 0.10 11.20 17.29 0.09 0.03 0.00 0.31 0.22 0.02 0.04 0.80 0.36 38.45 0.16SALT 83.48 0.58 0.23 0.26 0.00 0.00 0.01 0.02 3.98 0.47 0.01 0.28 0.00 0.11 13.05 19.13 0.10 0.03 0.00 0.36 0.25 0.02 0.04 0.19 0.43 43.71 0.19SC 84.19 0.56 0.25 0.25 0.00 0.00 0.01 0.02 3.93 0.50 0.00 0.28 0.00 0.10 14.10 18.59 0.10 0.03 0.00 0.38 0.26 0.02 0.04 0.18 0.42 43.94 0.20SNT 83.49 0.57 0.23 0.26 0.00 0.00 0.01 0.02 3.95 0.48 0.00 0.28 0.00 0.11 13.32 18.98 0.10 0.03 0.00 0.36 0.26 0.02 0.04 0.19 0.43 43.65 0.19STEEM 84.02 0.56 0.25 0.25 0.00 0.00 0.01 0.02 3.91 0.51 0.00 0.28 0.00 0.10 14.16 18.49 0.09 0.03 0.00 0.38 0.27 0.02 0.04 0.18 0.42 43.83 0.20STRAT 84.24 0.56 0.24 0.25 0.00 0.00 0.01 0.02 4.16 0.51 0.00 0.28 0.00 0.11 13.98 18.71 0.10 0.03 0.00 0.37 0.26 0.02 0.04 0.18 0.42 43.77 0.20TRON 88.09 0.42 0.16 0.19 0.00 0.00 0.01 0.02 2.86 0.33 0.00 0.20 0.00 0.08 9.10 42.39 0.08 0.02 0.00 0.25 0.18 0.02 0.03 0.14 0.31 31.18 0.13USDT 81.15 0.82 0.20 0.23 0.00 0.00 0.01 0.04 3.48 0.41 0.00 0.27 0.00 0.12 9.93 23.27 0.08 0.02 0.00 0.29 0.21 0.03 0.03 0.21 0.35 40.95 0.15VERI 80.61 0.65 0.15 0.30 0.02 0.01 0.03 0.02 4.24 0.31 0.02 0.27 0.00 0.14 8.74 21.23 0.13 0.02 0.00 0.28 0.21 0.05 0.04 0.23 0.47 42.92 0.13VTC 84.43 0.55 0.25 0.25 0.00 0.00 0.01 0.02 4.35 0.52 0.00 0.28 0.00 0.10 14.21 18.44 0.09 0.03 0.00 0.38 0.27 0.02 0.04 0.18 0.42 43.79 0.20WAVES 83.51 0.53 0.23 0.24 0.00 0.00 0.01 0.02 3.79 0.48 0.00 3.64 0.00 0.10 13.29 17.57 0.09 0.03 0.00 0.36 0.62 0.12 0.04 0.17 0.40 41.58 0.19XEM 87.69 0.44 0.19 0.20 0.00 0.00 0.01 0.02 3.14 0.39 0.00 0.22 0.00 0.08 32.42 14.54 0.07 0.03 0.00 0.29 0.21 0.15 0.03 0.14 0.33 34.61 0.16XLM 84.70 0.55 0.23 0.24 0.00 0.00 0.01 0.30 3.73 0.47 0.00 4.31 0.00 0.10 13.19 18.19 0.09 0.03 0.00 0.35 0.25 0.02 0.04 0.18 0.40 41.81 0.19XMR 89.26 0.39 0.17 0.17 0.00 0.00 0.01 0.02 4.63 0.34 0.00 0.19 0.00 0.07 9.20 28.20 0.06 0.02 0.00 0.26 0.17 0.01 0.03 0.12 0.28 44.79 0.13XRB 78.00 0.56 0.24 0.24 0.00 0.00 0.01 0.00 3.61 0.49 0.00 0.27 0.00 0.07 13.60 15.98 0.09 0.04 0.00 0.36 0.25 0.02 0.04 0.16 0.41 41.35 0.20XRP 91.56 0.86 0.12 0.12 0.00 0.00 0.00 0.39 4.03 0.24 0.00 0.47 0.00 0.60 7.25 41.30 0.20 0.03 0.00 0.18 0.28 0.01 0.02 0.32 0.20 34.82 0.13XVG 84.43 0.56 0.24 0.25 0.00 0.00 0.01 0.02 4.61 0.50 0.00 0.28 0.00 0.10 13.97 18.51 0.10 0.03 0.00 0.37 0.26 0.02 0.04 0.18 0.42 43.72 0.20ZEC 88.43 0.43 0.17 0.18 0.00 0.00 0.01 0.02 3.99 0.36 0.00 0.21 0.00 0.08 9.92 26.68 0.07 0.02 0.00 0.29 0.38 0.08 0.03 0.13 0.30 44.82 0.24Implicit Share 0.74 0.26 0.28 0.00 0.00 0.02 0.05 4.40 0.53 0.00 0.39 0.00 0.15 13.85 28.01 0.11 0.03 0.00 0.39 0.28 0.03 0.04 0.24 0.40 49.53 0.20
Note: Each number represents the implicit share of the fiat currency (column heading) based all purchases of the crypto (row
heading). For example, the value of 0.59 for the ADA-AUD pair indicates that 0.59% of ADA could be traced back to AUD.
The “Total %” column indicates the share of transactions that could be accounted for within the crypto. Implicit share is the
fiat share of crypto transactions.
currencies as a share of the fiat transaction for each crypto, with the last two rows indicating
the market and purchase share respectively. Figure 2b shows the same using the implicit
currency exposure data instead.
Within each crypto, the rankings may change depending on whether fiat share of implicit
currency exposure is used. However, it is also easy to see that despite this the Market Share
and Purchase Shares rankings of currencies do not drastically change across the two figures.
This consistency in aggregate market and purchase is due to the small weight that most
cryptos have in the overall crypto market.
16
Table 7: Different Measures of Crypto-Market Share (%)
Share RankBTC Direct Purchase Implicit BTC Direct Purchase Implicit
AUD 0.55 0.67 0.77 0.74 6 5 5 5BRL 0.34 0.25 0.32 0.26 10 12 13 12CAD 0.31 0.27 0.36 0.28 11 10 10 11CHF - 0.00 0.06 0.00 - 21 21 22CLP - 0.00 0.03 0.00 - 23 24 23CNH - 0.01 0.12 0.02 - 19 19 21CNY - 0.05 0.35 0.06 - 18 11 17EUR 4.82 4.26 4.74 4.40 4 4 4 4GBP 0.70 0.51 0.61 0.53 5 6 6 6HKD - 0.00 0.04 0.00 - 24 23 24IDR 0.22 0.36 0.41 0.30 13 9 9 9ILS - 0.00 0.03 0.00 - 25 25 25INR 0.08 0.15 0.18 0.15 16 15 16 15JPY 20.71 13.55 16.34 13.85 2 3 3 3KRW 15.37 29.78 30.10 28.01 3 2 2 2MXN 0.11 0.10 0.14 0.11 15 16 17 16MYR 0.05 0.03 0.05 0.03 17 19 22 19NZD - 0.00 0.01 0.00 - 26 26 26PLN 0.50 0.38 0.49 0.39 8 8 8 8RUB 0.36 0.27 0.32 0.28 9 11 12 10RUR - 0.03 0.12 0.03 - 22 18 20SGD 0.05 0.05 0.07 0.04 18 17 20 18THB 0.16 0.23 0.27 0.24 14 13 14 13TRY 0.54 0.43 0.59 0.40 7 7 7 7USD 54.83 48.39 48.94 49.53 1 1 1 1ZAR 0.29 0.20 0.24 0.20 12 14 15 14
Note: Share information from Table 4 and Table 6. Rank indicates the largest (1) to smallest (26) market share by each
transaction share.
4. Comparison to Established Global Financial Markets
4.1. Relative Stock Market Size and Market Share
Cryptos represent a new global finance option. To understand how its transaction dis-
tribution compares to current financial instruments, I compare the value of stock market
transactions in the country associated with each fiat currency in Table 8. Specifically, I use
17
Figure 2: Fiat Share of a crypto using (a) Fiat Shares and (b) Implicit Currency Exposure
(a) Fiat Share
(b) Implicit Shares
Note: Color scale transitions from Red (Low Share) to Green (High Share) within each row (crypto). A clear row within the
fiat share indicates that no fiats purchase the indicated crypto.
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the USD-equivalent value of 2016 stocks transactions, normalized by the stocks traded in
the USA stock markets, and compare that predicted share (relative to the US) with the
transaction share of the fiat currency within crypto market using the three measures market
measures derived in Section 3: crypto market share of fiat transactions, purchase share of
fiat transactions, and implicit currency share.8
All but four fiats account have a smaller share of transactions in the crypto market than
in their stock markets: IDR, JPY, KRW, and PLN: the KRW considerably so. All remaining
cryptos have a strictly fewer comparative transactions on the crypto market than they do in
their stock markets, with some below one-tenth of their stock market. This remains true for
the two Chinese currencies (CNY and CNH) even if combined, however, if the two Russian
currencies (RUR and RUB) are combined then the purchase share would exceed the stock
market transaction values, while the market and implicit shares would remain the below
stock market transactions.
4.2. Market Share and Economic Properties
Table 9 compares each currency’s share of crypto-market transactions (sorted by their
behavior relative to their stock market) to their economic properties. I consider economic
size (GDP), average income (GDP per capita), as well as two measures of global integration:
Trade Openness (Exports+ImportsGDP
) and the Chinn and Ito (2006) Chinn-Ito Index of Financial
Openness.9 The Chinn-Ito index ranges from 0 (financially closed) to 1 (financially open).
I also use the E-friction scores of Zwillenberg and Dean (2014) to capture ease of internet
access. The E-friction score incorporates information on a countries infrastructure, industry
development, individual frictions (such as payment systems or data security) and information
frictions (language support, a country’s commitment to internet access, etc.), with a lower
score indicated lower internet frictions (easier, free-er internet access). As internet access is
8Stock trade valued is obtained from the World Bank, current USD value. Code: CM.MKT.TRAD.CD9All data comes from the World Bank. GDP: NY.GDP.MKTP.CD. GDP per capita: NY.GDP.PCAP.CD.
Exports: NE.EXP.GNFS.CD. Imports: NE.IMP.GNFS.CD.
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Table 8: Transaction Shares in Crypto-market and Stock Markets (% of USD)
Direct Purchase Implicit Stocks—All crypto shares greater than stock market sharesIDR 0.36 0.41 0.30 0.21JPY 13.55 16.34 13.85 12.43KRW 29.78 30.10 28.01 3.81PLN 0.38 0.49 0.39 0.11—All crypto shares less than stock market sharesMXN 0.10 0.14 0.11 0.27TRY 0.43 0.59 0.40 0.67CLP 0.00 0.03 0.00 0.06RUB 0.27 0.32 0.28 0.33—All crypto shares less than half of stock market sharesAUD 0.67 0.77 0.74 1.89BRL 0.25 0.32 0.26 1.33CAD 0.27 0.36 0.28 2.74EUR 4.26 4.74 4.40 15.89GBP 0.51 0.61 0.53 6.05ILS 0.00 0.03 0.00 0.21MYR 0.03 0.05 0.03 0.23NZD 0.00 0.01 0.00 0.03RUR 0.03 0.12 0.03 0.33SGD 0.05 0.07 0.04 0.45THB 0.23 0.27 0.24 0.77ZAR 0.20 0.24 0.20 0.96—All crypto shares less than one-tenth of stock market sharesCHF 0.00 0.06 0.00 1.99CNH 0.01 0.12 0.02 43.49CNY 0.05 0.35 0.06 43.49HKD 0.00 0.04 0.00 3.21INR 0.15 0.18 0.15 1.88
Note: Stock trades 2016 stock market trades normalized to USA transaction values. Data for EUR and GBP is 2014. CNY and
CNH both use Chinese Stock Market transaction, while both RUR and RUB are compared to Russian Federation transactions.
If RUB and RUR were combined, all crypto-transaction shares would exceed stock market transaction shares.
a key component of crypto markets, it is possible that a high frictions would reduce crypto
transactions. The data is also represented in Figure 3, using both market share and the
market deviation from the stock market, defined as the ratio of the crypto share and the
stock market share.
There is no obvious correlation between crypto-share deviations from formal global fi-
nancial assets and economic size, income, or the two measures of economic openness, or
20
Table 9: No Relationship Between Transaction Share in Crypto-market and Economy Properties
Direct Purchase Implicit GDPC
GDPUSAGDPpcC
GDPpcUSA TOC CI e-Friction
—All crypto shares greater than stock market sharesIDR 0.36 0.41 0.30 5.01 6.19 37.39 0.41 74JPY 13.55 16.34 13.85 26.53 67.49 31.24 1.00 39KRW 29.78 30.10 28.01 7.58 47.78 77.68 0.72 41PLN 0.38 0.49 0.39 2.53 21.55 100.47 0.70 45—All crypto shares less than stock market sharesMXN 0.10 0.14 0.11 5.62 14.24 78.11 0.70 68TRY 0.43 0.59 0.40 4.64 18.85 46.82 0.45 58CLP 0.00 0.03 0.00 1.33 23.93 56.09 0.70 57RUB 0.27 0.32 0.28 6.89 15.18 46.27 0.71 57—All crypto shares less than half of stock market sharesAUD 0.67 0.77 0.74 6.47 86.62 39.95 0.94 30BRL 0.25 0.32 0.26 9.64 15.01 56.63 0.17 69CAD 0.27 0.36 0.28 8.21 73.14 64.39 1.00 25EUR 4.26 4.74 4.40 64.08 60.74 87.01 1.00 26GBP 0.51 0.61 0.53 14.22 69.99 58.03 1.00 28ILS 0.00 0.03 0.00 5.01 64.50 58.45 0.41 39MYR 0.03 0.05 0.03 1.59 16.50 128.64 0.42 44NZD 0.00 0.01 0.00 0.99 68.39 52.52 1.00 33RUR 0.03 0.12 0.03 6.89 15.18 46.27 0.72 57SGD 0.05 0.07 0.04 1.59 91.89 318.42 1.00 31THB 0.23 0.27 0.24 2.19 10.25 123.07 0.17 64ZAR 0.20 0.24 0.20 1.59 9.17 60.38 0.17 67—All crypto shares less than one-tenth of stock market sharesCHF 0.00 0.06 0.00 3.59 138.61 120.40 1.00 21CNH 0.01 0.12 0.02 60.13 14.09 37.06 0.17 69CNY 0.05 0.35 0.06 60.13 14.09 37.06 0.17 69HKD 0.00 0.04 0.00 1.72 75.79 372.62 1.00 21INR 0.15 0.18 0.15 12.15 2.97 39.81 0.17 73
Note: Germany’s values are used for the EUR Chinn-Ito Index and e-Friction score. All data is values from 2016, except for
the Chinn-Ito Index of Financial Openness which is for 2015 and the e-Friction score which is from 2014.
electronic access. Both large and small economies have crypto shares greater than (and
smaller than) the size of their stock market in the global economy, with the same true for
rich/poor, open/closed, and high/low internet ease economies.
4.3. Economic Exposure to Crypto-markets and Market Share
To determine an economies exposure to cryptocurrencies I calculate the fiat value of daily
transactions as a share of the value of the corresponding daily stock market transactions
within the economy:∑
c Vfc
Stocksf: how much is placed into the crypto-market relative to the stock
21
Figure 3: No Relationship Between Currency Share of Crypto And Four Economic Properties
Note: Visualization of the data in Table 9. Market Deviation is crypto market share divided by the stock market share: a
number greater than 1 indicates a greater share of crypto-investment than would be predicted using stock market size.
market. Results are reported in Table 10 and Figure 4, and range from 0.00% (CNH) to
82.45 (KRW). The second largest exposure is Poland at 37.26%.
The economic exposure does not correlate with cryptocurrency market share. Some
economies which have substantial exposure (PLN: 37.26%, IDR: 17.63%) have very little
crypto-market share. Whether this is good or bad is open to interpretation. On one hand,
cryptos represent a diversification asset (Bouri et al. (2017)), so this represents a reduction
in home-biased investment. On the other, the crypto market is dominated by only three
economies so that an economic crisis in one can generate contagion in the crypto-market
which could then spread to the exposed economies.
22
Table 10: Economic Exposure To the Crypto-Market Does Not Correlate With Importance In the Crypto-Market
Share
BTC Direct Purchase Implicit Crypto PurchaseStock Purchase
(%)AUD 0.55 0.67 0.77 0.74 3.74BRL 0.34 0.25 0.32 0.26 2.00CAD 0.31 0.27 0.36 0.28 1.05CHF - 0.00 0.06 0.00 0.02CLP - 0.00 0.03 0.00 0.31CNH - 0.01 0.12 0.02 0.00CNY - 0.05 0.35 0.06 0.01EUR 4.82 4.26 4.74 4.40 3.08GBP 0.70 0.51 0.61 0.53 0.96HKD - 0.00 0.04 0.00 0.01IDR 0.22 0.36 0.41 0.30 17.63ILS - 0.00 0.03 0.00 0.22INR 0.08 0.15 0.18 0.15 0.84JPY 20.71 13.55 16.34 13.85 11.48KRW 15.37 29.78 30.10 28.01 82.45MXN 0.11 0.10 0.14 0.11 4.14MYR 0.05 0.03 0.05 0.03 1.41NZD - 0.00 0.01 0.00 0.08PLN 0.50 0.38 0.49 0.39 37.26RUB 0.36 0.27 0.32 0.28 8.57RUR - 0.03 0.12 0.03 0.85SGD 0.05 0.05 0.07 0.04 1.24THB 0.16 0.23 0.27 0.24 3.12TRY 0.54 0.43 0.59 0.40 6,82USD 54.83 48.39 48.94 49.53 5.10ZAR 0.29 0.20 0.24 0.20 2.19
Note: Share information from Table 4 and Table 6. Rank indicates the largest (1) to smallest (26) market share by each
transaction share.
23
Figure 4: No Relationship Between Market Share And Stock Market Share
Note: Visualization of the data in Table 10. The size of the daily crypto purchases relative to the currency’s daily stock market
transactions is not related to its market share in the crypto-market.
5. Conclusion
Much like the internet that came before it, cryptos promise an increased linkage between
economies. This paper has established that the fiat purchases of Bitcoin are not a good
representation crypto market share, and introduced three different measures to accommo-
date the increasingly fragmented nature of the market when gauging market share: Direct,
Purchase, and Implicit. The different measures affect the ranking for mid-rank fiats that
have have concentrated purchasing in a few cryptos, and can increase or decrease the market
share of each fiat.
All three measures reveal that while these digital financial instruments have the potential
to link economies and increase financial flows, just three currencies—the KRW, USD, and
JPY—account for over 90% of crypto transactions, with the top four—KRW, USD, JPY,
24
and EUR—accounting for over nearly 95%. The size of these transactions do not follow the
relative sizes of the stock markets associated with these fiats, nor can this concentration
be explained by by the relative economic size, income, or openness of the economy. Some
currencies with large exposures to the crypto-market which may lead to an benefit from this
new digital economy by reducing home-bias and increasing diversification, or it may lead a
detrimental effect due to a new avenue of financial contagion that is much harder to shut
down using standard economic policy tools.
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